EU Targets Apple In Ebook Investigation

nk497 writes "The European Commission is investigating Apple and five publishers regarding ebook pricing, after raiding ebook firms earlier this year. 'The Commission will in particular investigate whether these publishing groups and Apple have engaged in illegal agreements or practices that would have the object or the effect of restricting competition,' the watchdog said."

The Agency Model is a racket!

[thesuperbigfrog]

The Agency Model [zdnet.com] is a racket that takes away a seller's ability to price ebooks how they see fit.

This is bad for the consumer since it means that market forces have less sway and there is little to distinguish one store from another. You will not find ebooks on sale and there is no point in "shopping around" since the price is the same everywhere.

If similar agreements were in place for other products, it would cause lawsuits. Imagine if all of the oil products sold by Shell or BP were given fixed prices. Media companies would love to have their own profit-guaranteed cartel and will push for illegal agreements to defend their aging business model.

Re:Lets not just include Apple

[bkaul01]

Paul Thurrott's column [winsupersite.com] on this speaks to that question, and describes the logic of the antitrust investigation pretty succinctly:

Before Apple's entry, publishers set the wholesale price of books, but retailers could determine the final selling price. But Apple changed that, allowing publishers for the first time to determine the final price at which eBooks were sold to consumers. As a result, the average selling price of new eBooks jumped from $9.99 to $14.99.

The EC will try to determine if the firms colluded to fix prices and restrict competition. Both charges should be easily proven.

As I reported in February 2010, while Apple was negotiating with the major publishers, at least one of them, Macmillan, demanded that Amazon raise prices on its Kindle books to match Apple's prices. Amazon, now as then, owns the dominant eBook platform, called Kindle. And Macmillan threatened to pull its books from the Kindle unless Amazon went along with the price hike. After temporarily pulling Macmillan's titles from its store, Amazon capitulated and raised prices as demanded.

"We have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books," Amazon wrote to customers at the time.

Re:duh

[apcullen]

Certainly publishers should be able to charge what they want for a book. The rest of what you say is good only... not true. You can find video games on sale for different prices from different stores. If you don't see different products at different prices, you're just not looking hard enough. Modern warfare 3 sells for $59 most places, but I managed to find it for $52. Lots of things go on sale. I could buy the hunger games trilogy in Hardcover from Barnes and Noble for $30 or from Amazon for $22. But the ebooks were the same price everywhere (and inexplicable more expensive than the hardcovers). Nobody cries foul because for other items because, while everyone buys things at the same price, they don't all take the same amount of profit and resell it at the same price. At least they don't have to. Ebooks are a problem because publishers have contracts explicitly saying how much profit a company can, and has to make (the "agent" model).

Re:duh

[Anonymous Coward]

Maybe there is a german word for that.

Actually, in Germany book sellers are required by law to sell books at the same price (at least those from German publishers). And for that, there is indeed a word: "Buchpreisbindung".

However the sellers are quite creative at it: You may sell damaged books at lower prices, and therefore you quite often find "damaged" books where the only "damage" is the text "Mängelexemplar" ("flawed exemplar") on them.

Re:the word is "Marketplace"

[BLKMGK]

Amazon ALLOWED?! Wow, way to rewrite history there. Amazon actually went so far as to pull Macmillan books from their store in protest but knuckled under the pressure. Their middle finger at the publishers has been to make sure anyone purchasing from them sees that the price is set by the publisher and NOT by Amazon.

Read this -> http://blog.macmillanspeaks.com/a-message-from-macmillan-ceo-john-sargent/ [macmillanspeaks.com]

Amazon did NOT go quietly on this and went so far as to pull quite a few books from their digital shelves trying to NOT be forced into this but the leverage the publishers held was simply too great. This lawsuit is what should have happened all over the place right then and there, that it's only happening now years later and in the EU is a shame. Why is it that lately the EU seems to be the only place where common sense appears to be spoken?